Builder Products Inc uses the weightedaverage method in its

Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May:

Required:

1. Compute the equivalent units of production for materials and conversion for May.

2. Compute the cost per equivalent unit for materials and conversion for May.

3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May.

4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May.

5. Prepare a cost reconciliation report for May.

Production data:
Pounds in process, May 1; materials 100% complete; conversion 90% complete		60,000
Pounds started into production during May		250,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 60% complete; conversion 40% complete		20,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	59,000
Conversion cost	$	23,400
Cost added during May:
Materials cost	$	306,420
Conversion cost	$	128,580
Required: 1. Compute the equivalent units of production for materials and conversion for May. 2. Compute the cost per equivalent unit for materials and conversion for May. 3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May. 4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May. 5. Prepare a cost reconciliation report for May.

Solution

1) Materials Conversion Equivalent units of Production                       3,02,000                          2,98,000 Working: Materials Conversion Physical Units % of completion Equivalent Units of Production % of completion Equivalent Units of Production Units completed and transferred out              2,90,000 100%                          2,90,000 100%                       2,90,000 Units in ending Work in process                  20,000 60%                              12,000 40%                             8,000 Total              3,10,000                          3,02,000                       2,98,000 Work in process, Beginning                  60,000 Add Units started during the period              2,50,000 Total Units to be accounted for              3,10,000 Less ending units in process                  20,000 Units completed and transfererd out              2,90,000 2) Materials Conversion Cost per equivalent unit $                           1.21 $                              0.51 Working: Materials Conversion Work in process Inventory $                       59,000 $                          23,400 Costs added during the perod $                   3,06,420 $                      1,28,580 Total Costs $                   3,65,420 $                      1,51,980 / Equivalent units of production                       3,02,000                          2,98,000 Cost per Euivalent units of produciton $                           1.21 $                              0.51 3) Materials Conversion Total Costs of Ending Work in process $                       14,520 $                            4,080 $                  18,600 Working: Equivalent units of production Unit Costs Total Costs Materials                           12,000 $                              1.21 $                  14,520 Conversion Costs                             8,000 $                              0.51 $                    4,080 Total $                  18,600 4) Materials Conversion Total Costs of Units transferred out $                   3,50,900 $                      1,47,900 $              4,98,800 Working: Equivalent units of production Unit Costs Total Costs Materials                       2,90,000 $                              1.21 $              3,50,900 Conversion Costs                       2,90,000 $                              0.51 $              1,47,900 Total $              4,98,800 5) Costs Reconcilation report Beginning Work in process: Materials $             59,000 Conversion $             23,400 Costs added during the period: Materials $          3,06,420 Conversion $          1,28,580 Total Costs to be accounted for $          5,17,400 Units completed and transferred out              4,98,800 Units in ending Work in process                  18,600 Total costs acconted for              5,17,400